NOTES OF THE DAY

Dominion, Volume 26, Issue 112, 4 February 1933, Page 10

NOTES OF THE DAY

A serious alternative has been presented to the Government by the Mayor. After March 31, Mr. Hislop says, the Government will either have to pay the whole cost of relief work in Wellington or relv upon the dole. Such heavy additional charges have been placed on the City budget by the Government’s high exchange policy that the Council' cannot continue to meet the heavy cost of supervision, equipment, materials, etc., for relief works, this is a grave statement and is directly at variance with the Council’s previous policy—one generally endorsed —of co-operating to the utmost with the Government in carrying the burden of unemployment relief. Nevertheless the City’s justification is clear enough. If the exchange rate had been forced up by the natural working of economic forces, it would certainly have been as badly off but could have had. no grievance. But since the rate has been raised of choice, it can justly contend that it has been prejudiced by the Government's deliberate act. Rather than see a breakdown in relief policy, it may be hoped, however, that some compromise may be reached before April 1.

It is evident from the trend of discussion in Britain and’America on the subject of the War debts that there will have to be a clarification of principles and ideas if a settlement by agreement—which is most desirable —is to come of the impending conversations with Mr. Roosevelt. As Mr. Chamberlain points out in a speech reported today, the negotiations are not to be regarded in the light of a bargaining encounter. It must be realised on the American side that the War debts are in themselves, and without reference to their influence upon economic conditions, of no value to the creditor country. They represent gold, certainly, but it is dead gold, which has no equivalent in goods and services. The money was borrowed for war purposes, and shot out of the guns. The Americans are inclined to regard the debts as an asset with which some bargain can be struck, but they are a dead asset, and that is what the British Chancellor obviously intends to make clear. Great expectations cannot be built on dead assets.